– $ 39,299.20.
This is the price of one single Bitcoin at the time of writing this article.
We know that most people reading this article will not be surprised by the low price of Bitcoin after crossing the $60,000 mark. But, as investors, it is important to take notes on the things happening behind the scenes.
We all know when Bitcoin drops in price, it takes a high jump right after. But we are still waiting for the high jump after Bitcoin dropped below $40K a month ago.
Now, there can be several reasons for Bitcoin to add anything to its price fluctuation. However, according to the critics, Bitcoin has finally come to the point of deflation.
While people are divided into two groups when talking about the current status of Bitcoin. For instance, market experts – meta profit – have different things to say.
According to them, this price fluctuation is normal, especially when more people are going on the Cryptocurrency bandwagon.
We certainly believe the experts, but we have also come up with our research, which is what we found.
What Triggered The Crash?
Before you understand why the market is crashing, you must know what triggered the crash. This will give you an idea of why the Cryptocurrency market is having a hard time recovering.
Experts believe that the main cause of the latest crash of Bitcoin is the proposal of the Russian Central Bank to ban Cryptocurrencies.
In January, the Russian Central Bank proposed that they are banning all the activity related to Cryptocurrencies in the nation.
According to a Russian financial expert, this movie was made because of the financial stability of Bitcoin.
As Russia is one of the industrial powerhouses, businesses started opting out of the Cryptocurrency movement. This results in businesses and individuals liquifying their Crypto assets.
Thus the Crypto market crash occurs.
Why Is Cryptocurrency Crashing?
For well over a century, no assets class has ever delivered a higher average annual return than stick class. But things changed when the first Cryptocurrency was introduced to the market.
Despite showing its potential to be an effective investment and potential candidate of replacing the fiat currencies, Cryptocurrency never made it big.
Perhaps this is because of the volatility and decentralization.
If you are looking for reasons and answers to why Cryptocurrency is crashing, these few factors are, to some degree, to blame.
1. Minimal Utility And Speculative Asset
Even though Cryptocurrencies have helped investors and traders with life-altering gains, it is important to understand that this technology is practically new and has limited application in the real world.
That means, if you belong to an industry where Crypto and Blockchain cannot be implemented, you might not feel they are real.
2. Countries Cracking Down Crypto
Investors and traders are all aware of the countries that are not OK with Cryptocurrencies. That means, if you are a trader or investor, you need to be aware of the rules and regulations regarding Cryptocurrencies before making any trade.
This makes the whole concept of connecting business on the global level a joke. Seeing just how many restrictions an individual faces while making online transactions, they simply want to avoid the legal mess.
3. Still Suffering From Lack Of Liquidity
One of the main problems every investor faces while liquidating a large portion of their digital asset is the overall liquidity of the market.
This is because, unlike in the stock market, there are not many traders looking to buy Cryptocurrencies.
Because of the lack of buyers, the market always suffers from a lack of liquidation, especially during the weekends.
4. Crypto Security Breaches
The Blockchain and other security factors might, to some extent, support the Crypto crash. This is because this industry is fairly new and still needs some work done to make the network more secure and compliant.
Because of the lack of security, individuals’ enthusiasm to mine Bitcoin or any other Cryptocurrency will decrease. This will directly affect the hash rate and overall price.
So, Should You Invest In Cryptocurrency!
Be the judge for yourself!
Investing in Cryptocurrency is a life-altering decision, and we wouldn’t want you to take it just because we have said so.
The only advice we can give you is that if you made the decision to invest in Crypto, invest only the amount you are willing to lose.
That’s it, now do your research, analyze the market and decide whether to invest or not. If you need any help, we are here; simply contact us.
